One should not play fast and loose with the facts, as was seen in a recent piece, “Yes Virginia, The Ex-Im Bank Does Cost Taxpayers” shows us. Thankfully, it’s even easier to make a point when you tell the truth. And the truth is, Ex-Im makes money for taxpayers at very little risk and has supported 11,050 jobs in Virginia in 113 companies with over $1.7 Billion in export sales.
Companies and working men and women in companies such as Bristol Compressors to Orbital Sciences to Optical Cable Corp. of Roanoke have utilized the Ex-Im Bank because private banks were unable or unwilling to provide credit to foreign purchasers of their Virginia made products and services.
Last year, Ex-Im covered their own operation costs and generated money, reducing the deficit. Last year, Ex-Im generated $675 million and two years ago it was a billion dollars. You can go look at the Treasury receipts if you don’t believe me. There are no questionable accounting standards – Ex-Im follows generally accepted accounting principles (GAAP) applicable to federal agencies and businesses.
Ex-Im does all this at very little risk – last year its default ratio, essentially the ratio of defaulted financing to total financing, was less than one quarter of one percent. That’s twelve times lower than the private sector.
The CBO report to which David Williams refers attempts to evaluate the future impact of Ex-Im on the budget and uses a methodology called fair value accounting that isn’t applicable to the Ex-Im Bank. Fair value accounting compares Ex-Im loans to similar loans in the private sector. If the analysis finds that the private sector is charging more, the theory goes that Ex-Im is losing out on some money, in this case $2 billion over ten years. But here’s the rub – there are no comparable loans in the private sector! Because Ex-Im only lends where the private sector doesn’t.
That pretty much makes fair value accounting a guessing game when it comes to Ex-Im.
Mr. Williams wouldn’t want you to know that Ex-Im has broad bipartisan support including informed free-market conservatives. What they’ve figured out is that Ex-Im doesn’t distort markets, it fixes them and allows American manufacturers to compete internationally.
There is responsible bi-partisan reauthorization legislation to assure that there is no discrimination in lending.
Letting Ex-Im expire would amount to abandoning many of our exporters as well as their 1.3 million employees across America. It makes better sense to act positively and thoughtfully for American jobs, competitiveness, and reducing the deficit.